The Los Angeles Times from Los Angeles, California • 111

Airlines: Winter of About Discontent on pel BY JOIIN F. LAWRENCE and PAUL E. STEIGEK Times Staff Writers relatively flat until well into the second half of the year, Spater says. But by that time he hopes to see gains of 6 or so over year-earlier levels begin to appear. He looks for a 9 rate of gain by mid-to-late 1972.

SPATER ADMITS that the slump has been much more painful than he or others in his industry had expected. "The economy is coming back more slowly than in past recessions," he says. The delayed recovery, Spater disclosed, has prompted American to negotiate with McDonnell Douglas Corp. to postpone the decision date for 10 options to buy additional DC-10 jetliners. American has orders for 25 of the jumbo trijets and options for 25 more.

It is a measure of the shock with which the recent downturn has THE STATE of the airline business, says George A. Spater, president of American Airlines, is like that of the magnolia tree in the yard of his suburban New York home. "Little pink buds are beginning to show, and you just know they're going to bloom sometime," he mused in an interview last week in Los Angeles. Then he shook his head. "But you know," he added, "it has been an awfully long, cold winter." The recent recession, Spater believes, has set his industry back two years.

After two and a half decades in which the annual rate of increase in traffic averaged a phenomenal 14, the airline industry now finds itself having to live with no growth at all. Indications now are that the curve representing traffic volume will stay departure performance in nearly three years. Indications that the Boeing 747 jumbo jetliner has won enduring rather than just novelty acceptance from the traveling public. The number of passengers in American's 747 flights has settled at a level of roughly twice that carried on conventional craft on the same routes, nearly matching the relative ratio of available seats. Reassuring signs from the Civil Aeronautics Board, including its willingness to grant 9 fare increases that will enable American to get back into the black this year.

"That's like getting back from disaster to something just a bit better than disaster," Spater says, alluding to American's record loss last year ($26.4 million compared with a 1969 profit of $38.5 million). THE FIRST quarter of 1971 brought a deficit nearly equal to that for all of 1970 ($24.3, million compared with a $4.4 million loss in the year-ago quarter), but Spater expects results for the rest of the year to more than offset that. American's most important business with the CAB right now, of course, is the proposed acquisition of Los Angeles-based Western Air Lines. Shareholders and directors of both companies have approved the deal, but competitor airlines particularly Western's Los Angeles neighbor, Continental Airlines are violently opposed and hope to persuade the board to disapprove or at- Please Turn to Page 2, Col. 1 But there is a brighter side, Spater says.

"There are real signs of springtime." The pink magnolia buds include: Confidence that the recession is, indeed, over. "The leading and coincident indicators are pointing up," he says. Progress in cleaning up the airport takeoff and landing bottlenecks that have so plagued airlines and their passengers in recent years. Spater salutes moves by the Federal Aviation Administration, such as in-' stalling backup computer and radar systems at New York, that he says have made it possible for American to ring up in March its best on-time Yii i 1 a nlr ill I lllfllfi Business Finance SECTION I SUNDAY, APR. 25, 1971 THE CONSUMER hit the airline industry that only a year ago Spater "was1? talking about exercising all 25 options immediately and eventually going for another 50 of the craft.

"Eventually, we'll probably still take that many," Spater says, "but right now it'sa question of either postponing the options or dropping them." THAT'S BAD NEWS for McDonnell Douglas and Southern California, of course, because it means a further thinning of the initial production flow for the new plane. United Air another big DC-10 customer, decided to stretch out its DC-10 orders earlier this year. EMPTY RAIL' STATION? No, Mary, the retired British luxury ueen jpi.sii i iiJ air iiinmi fp i in ill i If if: i i -r. I i 1 V- Suits Claim Camera Firm Distorts Picture BY ALEXANDER AUEKBACII, Times Staff Writer i UJ jiip, I I KZ-'. (vr- Wl 1 tj i i I 'Vx" 4 i 1 it's the main salon of the Queen liner now permanently berthed in Tab Ma, Pa Smaller Firm Rushes Aboard Ship Where Diner's Club BY AL DELL'GACII, Long Beach.

Surveying the ship's president of Specialty Restaurants Times Staff Writer involved, Tallichet people say, the specifications often are drawn along lines of the project as initially proposed by his organization. Competition is sometimes limited by the inability of a smaller operator to put a $500,000 building on land it cannot mortgage. What does the public get for this use of its land? Specialty Restaurants Corp. says that unused land is transformed into something attractive that produces income for the community in a place where none was produced before. A financial analyst, in a research report on Specialty Restaurants last December, commented on the "very attractive rates" of the company's long-term leases on public property.

The company's fiscal 1970 figures INSIDE THE MARKET Fee signed an agreement with the Federal Trade Commission saying it would not make such claims. The company says it is against its policy for a salesman to imply that the camera is free, and notes that there is a warning to that effect on its sales contracts, in bold print. The controversy over Traid's Fotron camera is far from unique. A vast variety of products are sold to consumers in their homes pots and pans, encyclopedias, housewares, cosmetics and according to the Federal Trade Commission, direct selling is a major source of consumer complaints. The FTC has proposed a mandatory "cooling off" period to give the buyer the right to cancel a contract signed at-home within three days.

COOLING-OFF legislation has already been passed in Connecticut, Georgia, Hawaii, Illinois, Massachusetts, New York, Vermont and Washington. Assemblyman Jack R. Fenton (D-Montebello) has proposed a similar plan for California. One of the most expensive items sold by salesmen in the home is an encyclopedia, and it was from the encyclopedia business that Traid's former management came (the officers resigned several months ago after a series of financial problems). Kenneth M.

Harden, the former president of Traid and still holder of 15 of its common stock, had been a senior vice president of Encyclopaedia Britannica Inc. A selling technique that has served the encyclopedia industry well is offering a "package" the books, bookcase, annual supplements and research services. Traid uses the same technique. For his $520 plus tax the Fotron buyer gets Traid's "package" consisting of the camera, three extra packages of film, a leather carrying case, three photo albums and 20 "savings account cards" to be used when buying more film or other merchandise. (The salesman keeps about $175 as commission, the firm says.) Please Turn to Page 2, Col.

a f' WANT TO TAKE some snapshots of the kids? With all the cameras to choose from, what would you think about the $520 Fotron, a camera that a photography magazine has called "highly overpriced, clumsy, with poor optical quality and few features to recommend Thousands of consumers have chosen the Fotron. They've done so at the behest of salesmen who came to their homes. Now a few of them are sorry they did, and are blaming the salesmen and the company. They've filed two class action suits, 'directed a two-foot-tall stack of complaints to the Los Angeles Better Business Bureau and written to the stale attorney general and other authorities. The salesmen would "usually stay two hours or more in a customer's home, pressuring individuals of little education and sophistication" to buy the camera, according to the complaint in the suit filed in Los Angeles.

The subject of all the fuss is Traid Corp. of Glendale. Quite aside from its legal wrangles, Traid has been operating in the red as its sales have plummeted over recent years. But the company still has about 25 salesmen in the field selling cameras. The company maintains they are also selling other products to satisfied camera owners.

THE CLASS ACTION in Los Angeles seeks a refund of the purchase price of the cameras plus damages of $5,000 per customer. A suit filed elsewhere in California also seeks a refund, plus damages of $1,000 per sale. Traid has asked the court to block the suits on grounds thay they are not proper class actions. It denies that the cameras are overpriced as the suits allege. In fact, says attorney Richard Riordan, a director of the firm, Traid loses money on each camera it sells.

In still another lawsuit, a former Traid salesman alleges that he "was told to sell the customer on the idea that (the customer) was given the Fotron camera free." A year before the salesman's statement, Traid fc -m 1 hi wT 1 i vastness is David C. Tallichet holder of master concession. Times photo by Joe Kennedy Feared to Tread showed Specialty paid gross rentals of $602,182 which includes a percentage of gross sales on some 20 operating properties. This is out of a total of $15 million expenses. MEN WHO HAVE watched Tallichet in action describe him as a brilliant promoter, as well as an imaginative creator of public attractions and a hard-headed overseer of costs.

It is obvious that his type of operation requires a deft touch with political people, as he deals with governmental bodies as potential landlprds. "He doesn't wait for anyone to bring him a deal," one competent observer says. "He goes out and shows them what he can do. He can put together deals that are unbelievable." Please Turn to Page 3, Col. 1 checked and my Philip Morris (stock) was 30 when Nixon said that.

I sold it the other day for 60." Not that all of this is to be construed as a suggestion about President Nixon's next line of employment. He may or may not prefer the securities industry. But time has proved him correct. ALTHOUGH IT took nerves of steel to have confidence in the stock market at the time, that was unquestionably the time to be a buyer. The Dow Jones industrial average of 30 blue chips is a mere 6 or so below its all-time high of 1000 reached on Feb.

9, 1966. Broader indexes such as the Standard Poor's 500 and the New York Stock Exchange index also are less than 10 below their all-time peaks, set in '1068. (They're long past their 1966 highs.) Virtually every segment of the market has rallied to some degree but there are weak stars and very Please Turn to Pace 12, Col. 1 Home Nixon Tip of It) Confirms WHEN YOU ARE next permitted to take a brisk turn around the deck of the stately Queen Mary May 8 at her Long Beach retirement berth you will be able to sustain yourself with decidedly un-English hamburgers, hot dogs and popcorn every step of the way. Within a few months the three upper decks are to be liberally stfld-ded with kiosks vending fish chips too.

In short, American style "fast food" has moved in where first class passengers on the grand old British liner once were wont to dine on pheasant under glass. ALL THIS and much more i3 the potentially rich province of Specialty Restaurants Long Beach, the new master concessionaire. The firm, which turned a $1.4 million net profit on $18 million sales last year and whose stock has soared from 9 into the 20s since January, is to a large extent the creation of David C. Tallichet Jr. A Texas who 13 years ago had no capital: Tallichet owns a majority of his 1.5 million shares, which are traded on the American Stock Exchange.

Although'his name is not well known outside Long Beach, his brainchildren are. Tallichet is the founder and guiding genius of the popular Ports O' Call and Whaler's Wharf shopping villages at Los Angeles harbor and of unusual restaurants which are better known for their "atmosphere" than their cuisine. THEY ARE in ultra-scenic spots all around the Los Angeles and San Francisco Bay areas, as well as in Chicago and Milwaukee. Most of Tallichet's operations are concentrated on public lands that he leases for long-term periods. It started in 1958 with Tallichet's first restaurant, the Reef, at Long Beach on Long Beach Harbor.

Among others on public land are the Proud Bird on the cleared-land final approach to Los Angeles International Airport, the Castaway in Burbank, Pieces of Eight in Marina del Rey, the Castaway in Oakland's Jack London Square and Pieces of Eight in Milwaukee. Tallichet has been able to capitalize on the scenic values of harbors, airports, rivers, hillsides without buying the properties on which he builds his handsomely-styled dining spots. Indeed, the sites mostly could not be duplicated with land available for private ownership and zoned for such development. Tallichet, a lean, tanned man in his late 40s, says he didn't start out with the intention of specializing in developing on leased public land. "It just so happened," he says in a voice that has not lost its soft Texas drawl in 16 years of Long Beach residence, "that the kind of site we Jjked was in public hands, and we buy ALTHOUGH MOST of the leases are put out for bids by the public agency Time (Lots IT MAY BE a little shattering to the ego of some of Wall Street's professional investors and security analysts.

I mean, who needs to pay hard-earned dollars for professional advice when the President of the United States is handing it out free? The advice came from President Nixon on April 28, 1970, a few hours before the New York Stock Exchange closed. He told a group of visitors: "Frankly, if I had any money, I'd be buying stocks right now." It was on the newswires in a jiffy. The Dow Jones industrial average reflected how most people viewed the President as a security analyst. It closed off 10.82 at 724.33, about its low for the day. And it did little but go down for the next 20 trading sessions, hitting its 631 bottom on May 26.

EVEN SECURITY analysts tended to scoff at the President. Said one: "I wish he hadn't said that. Shades of i BY ERNEST A. SCHONBEEGER Times Staff Writer 1929. It reminds me too much of Hoover trying to convince everyone there'd be no crash." But if you got the President's "tip" and rushed in to buy that very instant, you now might have excellent returns even though the Dow fell almost 100 points before it started rallying.

If you waited a few weeks after the "tip," you might have done better yet. The Dow is now up 30 to about the 940 level from the date of Mr. Nixon's statement and up 49 from the May 26 low. If your purchase was General Motors the first thought on the minds of many if they dare buck a shaky market at all you got it at 67. Today you'd be ahead about 20 points or 30.

Many stocks have doubled over that span. Beams one small stockholder who had faith: "I just PICTURE OF CONTROVERSY Although thousands of Fotron cameras have been sold, camera's maker, Traid Glendale, is now being sued by a few of its customers. Camera costs $520. Times photo by Steve Fontanini.